Anglo American and Shell Form Coal-Conversion Alliance

26 May 2006

Anglo American, one of the world’s largest mining groups, and Shell Gas & Power International have formed an Alliance in the field of coal conversion.

The two companies will take selective equity positions in emerging coal-conversion projects, combining Anglo American’s coal reserves and mining capabilities with Shell’s gasification and conversion technologies. The objective is the extraction and gasification of coal with the subsequent polygeneration of products including chemicals, hydrogen, power, synthetic liquid fuels and other uses.

Burning the synthesis gas generated by the gasification of coal emits lower quantities of greenhouse gases and pollutants than traditional coal burning and is the cleanest way yet found to harness the energy potential of coal. Even with that relative reduction, gasification still produces a large amount of carbon dioxide. Wide-scale implementation that does not result in driving up the loading of greenhouse gases in the atmosphere will require very large-scale carbon capture and sequestration.

The Alliance partners are currently investigating an opportunity to incorporate Anglo American’s Monash Energy Project, based in Australia, into the Alliance. This project is exploring technologies that produce liquid fuels from brown coal. The project initially envisages a coalmine, drying and gasification plant, carbon dioxide capture and storage and a gas-to-liquids (GTL) plant with associated power generation.

The brown coal fuel source and proposed processing facilities are located in the Latrobe Valley, 200km to the east of Melbourne, Australia. The area being examined for CO2 injection and storage is in the depleting oil and gas fields of the offshore Gippsland Basin.

The first stage commercial plant in the Monash Project is being designed to produce about 60,000 bpd of synthetic hydrocarbon liquids of which 80% would be ultra low-sulfur high-quality automotive diesel. Commissioning of the plant is targeted for 2016.

Comments

Australia may actually be a good place to site a CTL operation, especially one based on dirty lignite. That is because the continent is very sparsely populated, essentially flat and receives a lot of sunshine.

The CO2 produced could be sequestered biologically in giant shallow covered basins that are periodically filled with batches of seawater and suitable algae. The evaporated water could be sold, while the increasing salinity of the brine would kill off the algae. That way, the effluent could be dumped into the sea at great depth and the biomass accumulate on the ocean floor.

Other options would be to use algae that produce biogas or, to harvest their biomass, dry it and use it as a secondary feedstock for the Fischer-Tropsch process. Either way, the CO2 footprint per kWh produced would be sharply reduced, possibly to the level associated with oil consumption.

The problem, of course, is that covering large tracts of land with artificial basins would be expensive. The cost could be sharply reduced by using only deep skirts floating on the ocean surface. This variant is better suited to biogas or biomass harvesting than sequestration. Either way, storms would represent significant risks, as would leaks leading to uncontrolled algal blooms.

Use power plant waste heat for drying. Improves net energy balance. Use recycled plastics. In US, use Federal/Military land in the Southwest/West with barren deserts (not cactus). Concentrated sea salt could be a source for Minerals. From Chlorine, to Magnesium, to even precious metals/Uranium.

Wastewater (nitro rich/fertilizer rich/fecal matter rich) treatment with algae for fuel/carbon sequestation/animal feed/soil enricher. In Austrailia, the soil is poor due to little geological activity that enhances erosion (and thus soil). Thus practices brought by the European settlers have caused massive soil depletion. Add to that rabbits, and soil salination, and Austrailia may cease to be a major agricultural exporter in a generation. Bringing in minerals and compostng matter for soil restoration as well as better soil management may save them from agricultural ruin. Drip feed tubes (made from recycled plastics) to save water in the semi arid/arid and slow stop salination maybe one option. Perhaps rabbit hunting licences, sterilization, and ranching practice modification will also help solve the soil problem.

This project hasn't yet been widely publicised in Australia. 'Mission Accomplished' is set for 2016 which gives another decade for both brown and black coal burning to continue unabated. However they have acknowledged the problem. I hope they move on it quickly so we can see how realistic it is. I'm almost certain it won't work without huge subsidies. Recently the Australian Federal government has gone pro-nuclear so this project may not get the backing they want.

BTW the lignite is in a prime farming area with good, only mildly acidic rainfall.

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